Project Managers in Software Development and Hardware Development Projects: Key Differences

A special thank you to Alexander Ryabtsev, an experienced project manager and mentor, for his assistance.

First off, when the author of the article asked the six project managers about their functionalities, they all immediately resisted, saying "Everything depends on the project" or "If you need details, let's talk about a specific project." Because of this, the content — which was developed by synthesizing the experiences of our partners and colleagues — turned out to be more about the key components of the project management strategy. Additionally, our Case Studies provide an overview of the development of specific hardware projects with a connection to the technical objectives and ambitions of the customers.

Finding the ideal balance between the needs of the customer, the available budget, and the team's competencies is crucial in product development. Every product we have ever used has been the result of hours of meetings, disagreements, and missed deadlines. And a great project manager is a diplomat with a wide range of skills who knows how to get around any issues or challenges in order to finish a task on time.

It's crucial to keep in mind that we are discussing the management of projects that the product owner has outsourced. The idea generating phase, as well as the product's promotion, release and distribution phases, are outside the scope of these projects.

Hardware and Software Projects Management: Key Similarities

Let’s begin with a brief overview of the existing similarities of both domains:

• The interests of the end user come first in all projects, whether they be for hardware or software. An app or a gadget should be user-friendly, easy and safe to use, as well as carry value to a customer. Because of this, it is important to carry out research on real users. This places additional responsibility on the project manager, who needs to incorporate the results of the research into the product design.
  Therefore, it's crucial to have a testing phase with actual users for both types of projects.
• In both domains, the path to the end product is intricate and necessitates the participation of a multidisciplinary team (engineers, researchers, designers, etc.) who will work on the project for months or even years.
• The end user interacts only with the “front end”, or the control panel, in both types of projects. What's within? How does it operate? Unless they are interested in reverse engineering, the user is unaware of the answers to these questions. At all phases of the end user's involvement with the product, the project manager must be actively involved in decision-making to convert complex technology into a clear and understandable product interface (onboarding).
• There are many different project management techniques, including Kanban, Agile, Scrum, LEAN, sprints, and standups. In both domains, they are actively employed. However, it should be acknowledged that software and hardware do not necessarily advance at the same rate; rather, they borrow useful techniques from one another and customize them to fit their unique needs. As an illustration, software development adopted the lean manufacturing process from production, whereas hardware development adopted the agile methodology from software.

The essential commonalities have, in theory, been covered, and we are now moving on to the contrasts.

Hardware and Software Projects Management: Core Discrepancies

After speaking with project managers from both industries, we have identified the top 5 differences. NB: The specifics of a particular project are not taken into consideration.‍

Defining The End Product: Certainty VS. Uncertainty

It goes without saying that the idea and concept of a product set the framework for development. The laws of physics and market demands are just two examples of the many variables that will affect how the idea will ultimately be implemented. Additionally, compared to hardware development, the framework for software projects is more flexible.

Software projects

The customer and the development team frequently have just a general idea of the end product during the development phase. The team and PM have an understanding of the product's main functions and the problems that the software is supposed to address. The functional properties of the under development object may also drastically or partially alter following MVP testing. It is completely normal practice for software development to first release a beta version, test it with actual users, get feedback, and then adjust the functionality, user interface, and product design to better suit the needs of the target audience. In certain instances, this method essentially eliminates the need for extensive market research by replacing it with testing of a minimum viable product.

Hardware projects

The step of formalizing an idea into an object concept is unachievable without a thorough marketing analysis of the device because the development goal of a hardware project is a physical product. The project goes through a feasibility stage on the executor's end, when the future product is examined from both the expectations and demands of users and from a technological perspective. Based on the outcomes of the feasibility stage, the initial terms of reference are changed, and a final list of technologies—the project roadmap—is created. Which technology will be applied to create the product must be decided. The success of the project depends on the creation of precise and thorough terms of reference. The PM should now determine all potential risks and distinctly outline the "critical path" from start to MVP. After all, the closer the MVP is to the desired product, the higher the chance of completing the project on time In contrast to software projects, the cost of stepping back is very high, especially if the project has advanced from the stage of preparing design documentation to the process of producing the first physical prototype. This distinction becomes especially crucial when it comes to the acquisition and delivery of the future product's materials and components (more on this in the paragraph about stakeholders).

Project Manager’s Role

All things considered, when developing a software product, the project manager has a lot more flexibility because the project may nearly always take a step back and modify the technical and aesthetic aspects of the final product. Low cost of error = ease of "stepping back".

The PM of hardware projects must weigh the risks before moving on to the next step because, for instance, a mistake in the component density on the board may necessitate redesigning not only the board but also other components of the product, such as the enclosure solution. There are points of no return, therefore errors have a severe penalty.

Product Development Duration

This point is a logical extension of the previous one. The rate of development is crucial for market success. Of course, waiting can result in competitors snatching over entire niches in addition to the loss of one-time revenues.

Software projects

Obviously, the complexity and size of the solutions being developed will affect how long it takes to implement them. A period of 1.5 years can be regarded as normal in software development, according to our estimates, from the conception of an idea to the introduction of a finished product to the market.

Hardware projects

From concept to market introduction, a two- to three-year development period is typical for hardware. It is important to note that because approved testing and sales licensing are required, the time to market in the healthcare sector can often be substantially longer.

Project Manager’s Role

Although project scheduling varies across domains, there are no significant distinctions in the role of the project manager; in both situations, the PM's responsibility is to deliver the finished product to the customer by the deadline. The deadline in this situation dictates the rate of progress. Software project managers must respond fast to intermediate stages and results due to the shorter timeframes. Due to the larger number of stakeholders and "high price" of an error at the intermediate stage, hardware projects progress at a more measured pace.

The Number of Stakeholders Involved in the Product Development

Finding a balance between the deadline, the team's interests, the client's needs, and market expectations is a key component of project activity. Effective communication amongst all stakeholders is essential to the project's success.

Software projects

Apart from the customer team, the software PM generally communicates only with the internal team + external consultants as needed. This enables them to concentrate solely on the management and organization of the development process. In a nutshell, the software project manager's job is to find a compromise between the three key parties involved: the customer, the team, and the consumer.

Hardware projects

Here, the project manager has a non-trivial job of striking a balance between all the nodes of the “project chain”. In addition to the interests of the internal product development team (electronic engineers, programmers, designers, constructors), it is important to consider the technological aspects of the future product: communication with the production and tooling engineers. The process setup is just as crucial as the actual development. It is best to think about manufacturing from the very beginning of the development process. The selection and delivery of components for the project constitute a separate process that needs to be managed and monitored. The fact that it's critical to create the best logistical chains for large manufacturing as well as small-scale production during the development stage complicates this procedure. In certain circumstances, it is essential that the project manager pay attention to the certification requirements of the upcoming product right from the start of the project.

Project Manager’s Role

The project manager seeks to balance the interests of all stakeholders in both domains. The main difference between software and hardware projects is the greater number and diversity of the latter. When developing hardware, it's important to consider both the sales market and the supply market for the product's manufacturing and support – material suppliers, OEM companies, software suppliers, customs, certification authorities, logistics companies, etc. These stakeholders are frequently involved in hardware projects, while quite uncommon in the software industry. The requirement to identify production restrictions from the outset is another particular aspect of hardware projects. It is important for the PM and the team not only to develop a great product in a single copy, but also to prepare it for mass production, which introduces another "player," the company's technology bureau responsible for mass manufacturing.

MVP and Market: Pace VS. Sequence

In product development, a minimum viable product is a crucial cutoff point that can be used to confirm or dispute results from PoC tests and assess if the prototype functions as intended.

Software projects

A minimal viable product in software projects enables changes while it is being tested on actual users. Quick customer feedback is undoubtedly advantageous because it cuts down on the time and expense required to make modifications from the "raw version" to a marketable product. For instance, you can construct an MVP for a mobile app in 1-2 months and deploy it to a large number of consumers. And the cost of launching your MVP is essentially unaffected by the number of users..

Hardware projects

In the vast majority of cases, a minimum viable product in hardware projects is a physical prototype, which instantly complicates the process of  testing the final product.

3 key challenges can be singled out: 

• On the basis of a single prototype, it is impossible to obtain useful feedback. The first small batch is typically required for such sectors as Consumer and Wearable devices and healthcare, which raises the price of producing MVPs.
• Simple testing procedures can be carried out by members of the development team or by outside expertise. However, testing in the target audience makes it difficult to obtain reliable information based on actual user experience, both unconscious  interaction and consciously provided feedback from users (FGD, interviews).
• It is impossible to complete the entire process of finalizing and debugging the prototype at the MVP testing stage, as it is with software products. Consequently, it takes longer to repair problems once they are collected.

Project Manager’s Role

The flexibility of software projects in terms of the technology application gives the manager a wide range of options for experimentation and, in the extreme case, the ability to take a step back without critical costs. Hardware projects managers face a more rigid framework in terms of project lifecycle. Although it is possible to go back, they must go with extreme caution due to the significant potential for loss.

Choosing a team and arranging the development process

Software projects

Even before the Covid-19 era, remote software development was the standard; the epidemic accelerated the shift from office to remote. Nowadays, one of a project manager's major competencies is the organization of efficient work with remote workers. The availability of human resources (both number and quality) must be stated separately. There are numerous courses available that allow students to acquire the fundamental skills of a developer in as little as one year, making the entry barrier to the software development industry fairly low. Consequently, the cost of hiring staff, especially line specialists, has dramatically decreased.

Hardware projects

Hardware developers faced a severe problem with Covid-19. Although the procedure suffered less at the early stages of developing hardware products, problems increase as we get closer to the product's physical embodiment:

• assisting with setting up a safe workspace at home; 
• dealing with the physical components of the prototype, particularly if multiple relevant experts must work on it concurrently; 
• assisting with the manufacture and testing of the prototype.

Comparatively speaking to the software industry, which had a reasonably easy transition to remote work, hardware developers faced insurmountable challenges. With regard to the selection of the team, it can be said that the entry barrier to the profession is typically 4, or 6 times greater. Without a specific higher degree, an Electrical Designer, for example, is a rare exception.

Project Manager’s Role

The number of represented specialists in each domain differs significantly, according to the data from Upwork, one of the biggest freelance markets in the globe. In comparison to 34.5 thousand contracts in the hardware sector (34.5 thousand include services of architects and specialists in the chemical industry), there were more than 211 thousand contracts for software projects in 2021. Indirectly, these numbers support a higher level of demand and supply for software specialists in the labor market. Assembling a team of qualified professionals for a hardware project is not the easiest assignment for the project manager in this scenario because it requires bringing the team "under one roof." The ability to assemble some or all of the team remotely allows the PM of a software project to be more adaptable and responsive when putting the team together.

Hard Skills of the PM

In this part, we will compare what professional background the PM should have in both domains. Additionally, we will outline the project's role allocation models.

Software projects

Although it is unquestionably a big bonus to have expertise and skills in software project development, they are not a necessity for a successful software project manager. In both domains, the project manager serves as the primary conduit for customer and team communication and is largely focused on management (ordering the process, assigning roles, and controlling deadlines). The involvement of the "system architect" (technical lead), as well as team leaders, in project management makes up for the software project manager's lack of technical expertise. Typically, architects and team leaders communicate directly with customers on the technical aspects of a project, enabling them to rapidly and directly reach strategic and tactical decisions.

Hardware projects

Technical expertise is crucial for managing the development of a hardware project, along with managerial, communication, and methodological skills. This refers not only to higher technical education, but also to experience as a development engineer. When deciding on materials, components, and core product solutions, the engineering foundation enables the PM to take all hazards into account. This allows for complete strategic control of the development and the achievement of stakeholder balance. On hardware projects, the technical lead is in charge of the operational level technical components of the project and is accountable for justifying modifications and decisions to the PM. When the PM, not the customer, is the owner of the product design, this approach becomes glaringly obvious. The technical leader can interact directly with the customer on tactical issues, but strategic decisions are the responsibility of the project manager. 

Project Manager’s Role

The primary distinction between the domains on this point is the optional technical background of software project managers. Developer experience is a great benefit, but communication and organizational skills are far more crucial. Potential technical deficiencies are made up for by the project's "system architect". In the hardware industry, the PM should have effective project management experience (even without technical education), but based on our company's experience, real development experience and specialized training for PMs are essential for a project's success. In our business, there are 4 PMs, and 3 of them hold PhDs in technical sciences. Each project manager has a strong background in project management, innovative product development, and applied research in technological sciences. This enables them to delve into production technology, in addition to considering product life cycle aspects based on materials, product applications, usage situations, etc.

Conclusion

The non-trivial responsibility of trying to please everyone falls on the shoulders of any project manager. After reading this article comparing the nuances of project management in both domains, it may seem that managing software projects is simpler than managing hardware ones, however this is undoubtedly not the case. 

The software industry is undeniably more dynamic. There are more tools and options for quick and inexpensive feedback from the target market of the future product, as well as more opportunities for experimentation and hypothesis testing. All these benefits and simplicity in comparison to typical hardware development have a drawback:

• competitors have precisely the same advantages, hence even tiny flaws from the project manager might have a significant negative impact on the product in terms of market competition;
• the project manager in software development must maintain high speed throughout the project and make decisions under time constraints due to the more flexible and dynamic environment;
• building communication within the team might be challenging, as most of the work is done remotely for the software domain; for example, problems that can be resolved in a face-to-face meeting of 15 minutes are almost impossible to address in an online setting in the same amount of time. Permanent synchronization necessitates a high level of attention to intra-team dynamics.

Hardware projects tend to be less adaptable and dynamic. When a product transitions from a CAD model to a real prototype, the project manager has a more measured work rhythm but a higher cost of error. The high cost of testing prototypes on a real target audience and the poorer quality feedback make it difficult to create hardware. In conclusion, despite the variations between the roles played by project managers in software and hardware projects, both domains have a set of traits and competencies that enable them to confidently handle uncertainty.